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Swiss expect 5 billion franc budget deficit due to pandemic, Ukrainian help

·1 min read
FILE PHOTO: Shoppers walk along the street after the Swiss government relaxed some of its COVID-19 restrictions in Zurich

ZURICH (Reuters) - The Swiss government is expected to run a budget deficit of 5 billion Swiss francs ($5.25 billion) for 2022, it said on Wednesday, citing extraordinary costs from tackling the COVID-19 pandemic and supporting new arrivals from Ukraine.

Expenditures to tackle the economic effect of the pandemic, such as short time working and lost wage compensation schemes, amount to 6.5 billion francs, the government said in its latest forecast.

Another 900 million francs will also be needed to support the 61,000 Ukrainians who have arrived in Switzerland following the war with Russia.

Without these exceptional allocations, the government expects a budget surplus of 700 million francs, better than the previously anticipated deficit of 600 million francs, due to factors including better-than-expected sales tax receipts.

The government also received a payout of 1.3 billion francs from the Swiss National Bank which will help it reduce the shortfall.

The government had previously budgeted for a shortfall of 2.3 billion francs for 2022.

($1 = 0.9527 Swiss francs)

(Reporting by John Revill; Editing by Kirsten Donovan)